U.S. Files Amended Complaint to Forfeit $500,000 in EB-5 Funds From Sanctioned Chinese Coal Company Accused of Laundering Money for North Korea

WASHINGTON - The United States has filed an amended
complaint to forfeit an additional $500,000, for an aggregate amount of
$4,583,935, from Dandong Chengtai Trading Co. Ltd. also known as Dandong
Zhicheng Metallic Material Co., Ltd, and its owner Chi Yupeng, announced U.S.
Attorney Jessie K. Liu and Jeffrey S. Sallet, Special Agent in Charge of the
FBI’s Chicago Field Office.

The original complaint, which sought to forfeit $4,083,935, was filed on Aug.
22, 2017 in the U.S. District Court for the District of Columbia. According to
the complaint, Dandong Chengtai is owned by a Chinese national, Chi Yupeng, and
is based in Dandong, China. The investigation revealed that North Korea exports
coal for the benefit of the North Korean government, and in particular, its
military. Coal generates over $1 billion in revenue per year for North
Korea.

Also on Aug. 22, 2017, the Treasury Department designated Dandong Zhicheng for
having sold coal from North Korea. The designation noted that Dandong
Zhicheng allegedly used the foreign exchange received from the end users of
North Korean coal to purchase other items for North Korea, including nuclear
and missile components. Chi Yupeng was also designated, for having used a
network of companies to engage in bulk purchases, wire transfers, and other
transactions on behalf of North Korean interests.

Today’s amended complaints adds $500,000 seized from an EB-5 visa investment
account. The EB-5 visa program provides a method for eligible immigrant
investors to become lawful permanent residents (i.e., “green card holders”) by
investing at least $500,000 to finance a business in a targeted employment area
in the United States that will employ at least 10 American workers.

From on or about Nov. 5, 2015, through Nov. 13, 2015, according to the amended
complaint, Chi Yupeng and his wife directed 12 wire transfers by 12 different
individuals for a combined total of approximately $568,405 into a bank account
in the United States controlled by a family member. These wires ranged in
values between approximately $31,335 and $50,000, which the government alleges
was part of a scheme to circumvent Chinese capital outflow rules. On Nov.
13, 2015, the same day as the final transfer into the U.S. bank account, Chi
Yupeng and his wife caused a wire for $550,100 to be sent to an EB-5 investment
program account.

The amended complaint states that those funds are subject to forfeiture as Chi
Yupeng and Dandong Chengtai generated millions of dollars of revenue from the
illegal sale of North Korean coal that benefitted sanctioned entities in North
Korea. The subsequent laundering of the proceeds of these transactions,
including by attempting to invest in the EB-5 program is in violation of U.S.
law.

The claims made in the complaint are only allegations and do not constitute a
determination of liability.